One of Europe's largest banks, BNP Paribas operates about 7,150 branches in some 75 countries across Europe, North America, Africa, and Asia. The company and its many subsidiaries specialize in retail banking, corporate and investment banking, and investment services. BNP Paribas operates in Italy through BNL banca commerciale. The French banking giant also owns Belgium's BNP Paribas Fortis, which operates more than 1,000 branches in Europe and the US. In the western US the company owns BancWest (the parent of Bank of the West and First Hawaiian Bank). BNP Paribas earns more than half of its revenue outside its home country of France.
The Paris-based bank is active in four domestic markets: Belgium, France, Italy and Luxembourg. Europe is the bank's largest market, accounting for more than 75% of revenue. North America contributes about 10%, while the Asia-Pacific and Africa region and other countries each contribute more than 5%. BNP Paribas has operations in 78 countries overall.
Retail banking, with some 6,800 branches spread across 40 countries, accounts for more than 60% of the bank's revenue. BNP Paribas is engaged in retail banking in France, Italy (Banca Nazionale del Lavoro, acquired in 2006), Belgium and Luxembourg (BNP Paribas Fortis and BGL BNP Paribas), and throughout the euro zone, the US, and in Asia, the Miditerranean Basin, Africa, Turkey, and Central and Eastern Europe.
BNP Paribas' Investment Solutions division includes BNP Paribas Securities, BNP Paribas Wealth Management, and insurance firms BNP Paribas Cardif and Pinnacle Insurance (Cardif Pinnacle).
Other holdings include private bank BNP Paribas Banque Privée, consumer lender Cetelem, online brokerage Cortal Consors, BNP Paribas Asset Management.
The bank's revenue has been declining since 2010 as the lackluster economic environment in Europe depressed results. In 2013 BNP Parisbas reported revenues of €38.8billion, a decline of less than 1% versus 2012 (and 12% since 2010). Net income fell about 25% year over year to €4.8 billion. Of the bank's three core businesses, retail banking (the largest) posted a 2% decline in annual revenue, while revenue from corporate and investment banking fell 11%. investment solutions saw its revenue climb 2% year over year.
Major acquisitions in recent years have turned BNP Paribas into a leading bank in the euro zone and beyond. The company has expanded its operations into about a dozen countries since 2004.
Despite all of this growth, BNP Paribas has not been immune to difficulties in the banking sector, especially in Europe where banks were exposed to sovereign debt. Indeed, BNP Paribas took a €3 billion ($4.1 billion) hit after it marked down the value of its Greek debt by about 60%. It also reduced exposure to other European government debt in places such as Italy and Spain.
While retail banking has remained relatively strong, BNP Paribas has seen declines in its corporate and investment banking unit due to poor market conditions and losses on sales of sovereign bond debt. As a result the bank is engaged in ongoing cost cutting and the implementation of 2014-2016 business development plan. The plan includes three fundamental programs: Simple & Efficient, a reorganization and efficiency program now under way; the Asia Pacific plan intended to increase revenues at Corporate and Investment Banking and Investment Solutions; and Hello bank!, aimed at developing the digital bank.
Mergers and Acquisitions
In November 2013, BNP acquired Belgium's 25% share in its local consumer-banking unit, BNP Paribas Fortis, for 3.25 billion euros ($4.37 billion), as the country works to cut public debt. It also acquired Poland's Bank BGZ from Rabobank Group in 2013.
Two of the French bank's most transformative acquisitions included the deal to buy Italian bank Banca Nazionale del Lavoro in 2006 and the 75% purchase of Fortis Bank (which also included a 25% stake in Fortis Insurance). Both deals boosted BNP Paribas' retail banking business across Europe. Retail banking is now responsible for more than 60% of BNP Paribas' revenues.
In addition to the Fortis and BNL acquisitions, BNP Paribas looked to grow in new markets. BNP Paribas acquired Sahara Bank in Libya and a 51% stake in UkrSibbank, one of Ukraine's leading banks. In 2011 BNP Paribas continued its strategy of expanding in high growth markets and acquired a majority of South Africa's Cadiz Securities. BNP Paribas also owns Banque Internationale pour le Commerce et l'Industrie, which is active in six African nations, and a majority of Türk Ekonomi Bankasi in Turkey. BNP Paribas has been expanding in China, Egypt, Israel, and Russia as well.
In 2012 the comany sold the bulk of its controlling stake in real estate firm Klépierre to US mall owner Simon for some €1.5 billion (around $2 billion) to further raise its capital levels.